Money Insider: Lloyds Bank joins scramble for new current accounts
Friday 28 March 2014
The unprecedented level of activity in the current account market shows no sign of abating, with Lloyds becoming the latest high street name to revamp its bank account offer from Monday.
It has badged its new account 'Club Lloyds' and looks to reward those who use it as their main account for day-to-day banking.
Looking at the offer in more detail, the interest paid on credit balances is the bait that Lloyds hopes will hook most customers.
There is a headline 4 per cent AER on balances between £4,000 and £5,000. On smaller balances you'll get a less impressive 1 per cent from £1 to £1,999 and 2 per cent from £2,000 to £3,999.
The credit interest is competitive but for existing Lloyds Vantage customers it is less attractive on smaller balances. For those with bigger credit balances, the 123 deal from Santander paying 3 per cent from £3,000 to £20,000 remains attractive.
Other benefits include access to a monthly saver account paying 4 per cent and allowing you to pay in up to £400 per month and with the chance to receive interest on a monthly basis.
For customers taking out a Lloyds Bank mortgage there is a Club discount of 0.2 percent. It's a decent reduction but you'd still be wise to get an independent mortgage broker to check the deal represents a good rate compared against the whole market.
There is also a free 'lifestyle option' where you choose from six free cinema tickets a year, an annual magazine subscription or a restaurant discount card. Nice to have but not the basis on which to choose your bank account.
When it comes to overdrafts I'm pleased to see the introduction of a £100 interest and fee-free buffer but at the same time disappointed that the high overdraft interest rate of 19.94 percent EAR and £6 monthly usage fee remain.
If you're not somebody who keeps much of a credit balance and are regularly overdrawn more than £100, there are cheaper bank accounts to choose from.
Similarly, if you use your debit card abroad, you'll pay a 2.99 per cent foreign transaction levy plus a £1 charge for each card purchase made outside the UK. So if you're a frequent traveller overseas this may not be best account for you. To qualify for the account, you must pay in a minimum of £1,500 a month (three times the amount required by TSB) and have at least two monthly direct debits.
If you don't want to meet these requirements, you can still open a Club Account but it'll cost £5 a month, which dilutes the financial benefits and will prevent people using it as an additional savings account.
As with all current accounts, Club Lloyds has its good and not so good points depending on how you run your day-to-day banking. So it's essential to make sure you understand how the different components will work for you before signing on the dotted line.
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Mark Dampier: An infrastructure fund that builds returns by taking different roads
Simon Read: Timeshare owners accuse Macdonald Resorts of land grab
Donald MacInnes: Let's pretend Scotland won and now a salmon is running the country
10 tips for taking out a personal loan
Bargain Hunter: Win a new iPhone 6
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize